Friday, June 4, 2010

Cuban media on economic reform: the barbershops

To my knowledge, this article from Ciego de Avila is the first mention in Cuban media of the reform that is turning barbers and beauticians from employees to contractors who pay fixed monthly fees to the government and keep their profits for themselves.

The article explains how the system works; the monthly fees cover rent, taxes, and retirement contributions, and they vary by municipality.The barbers buy their own supplies and set their own prices.The article refers to “leasing” on an individual basis, not the creation of cooperatives.It’s not clear if these people will now be counted as trabajadores por cuenta propia (self-employed).

It says that 108 workers in 65 locations in the province are in this new system, which “for now” has been implemented only in shops with three or fewer seats.

Mainly, the article describes benefits of the new system: big savings for the government, better earnings for the barbers and beauticians, and better service for consumers.One barber complains that his contract is for one year only, not for a longer term.

The kicker: The article calls the new system “an important step in the current economic adjustment that has as one of its main goals relieving [the state] of the heavy load brought about by the excessive paternalism in which it has engaged for more than half a century.”

Important, yes, in that it breaks new ground, and very important if it is applied far beyond barbershops and beauty parlors with three seats or less.In that regard, this passage from a Reuters report on Raul Castro’s birthday stands out:

Venezuelan President Hugo Chavez, Cuba’s closest ally, said on Venezuelan television last week that Castro confided to him – as a warning not to do the same thing – that Cuba had “committed many errors” in its development of communism.Chavez quoted Castro as saying: “Here we nationalized even the funeral home, the barber shop, the sale of ice cream. That doesn't have any reason to belong to the state.”